Which management method is used to establish the selling price for services and merchandise?

The management method that is most fitting for establishing the selling price for services and merchandise is cost-plus pricing. This approach involves calculating the total cost of delivering a product or service, which includes all expenses related to production, labor, and overhead, and then adding a fixed percentage or a predetermined amount to that cost to determine the selling price. This method ensures that all costs are covered, and it guarantees a profit margin on each sale.

Cost-plus pricing is widely used in various industries because it is straightforward and easy to implement. It provides businesses with a clear pricing strategy based on their internal cost structure, allowing them to maintain profitability while being competitive in the market.

While other methods like penetration pricing focus on gaining market share by setting lower prices, or dynamic pricing adjusts prices based on real-time demand and supply conditions, these strategies are more situational and do not provide a systematic approach to pricing based on costs. Price determination, while it may appear relevant, is a broader term that encompasses various methods of setting prices, rather than a specific strategy applicable to all situations.